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Real estate investor and manager Cromwell Property Group (ASX: CMW) has come out the end of 2018 with a strong investment portfolio and a clear mandate for the future.
The company reported half year statutory profit of $111.1 million, up 37.5 per cent on 1H18, and operating profit was $82.6 million, up 7.6 per cent on 1H18.
Cromwell now manages more than 3,700 tenant customers in 15 countries, leasing over 3.8 million square metres of space, and manages $11.5 billion in assets.
CEO Paul Weightman (pictured) says the company's plans to build on investments paid off during the half.
"The objectives of the Invest to Manage strategy we highlighted in August are to build enterprise value, add to medium-term earnings and generate total securityholder return," says Weightman.
The company will continue down this proven path now by investing in new opportunities and adding value to current investments.
"Over the last six months we have made progress on the value-add opportunities in our direct property portfolio, we have allocated additional capital to our indirect property portfolio including the Cromwell European REIT, or CEREIT, and worked with our institutional capital partners on funds and mandates that meet their investment criteria."
The company has a clear roadmap going forward, especially for its future investments. Cromwell is looking at developments in Melbourne, Canberra and Adelaide in addition to its current development project on Victoria Avenue in Chatswood.
Perhaps acknowledging the ageing population of Australia, especially as the Boomer generation moves into retirement, Cromwell has been investing heavily in the seniors living sector. The company says its conversion of the Tuggeranong Office Park into a 500-resident senior living village is progressing well. Cromwell also recently acquired a premium senior living village on the Upper North Shore of Sydney for $60 million.
"Seniors Living, particularly at the premium end of the market, is a theme which we believe has potential and further updates will be provided as we hit key milestones," says Weightman.
Weightman also added that the company has a strong and growing business in Singapore and an established platform in Europe, that is serving the company well.
Despite the optimism surrounding the company's own plans, Weightman is conscious of global trends and domestic events that are unpredictable.
Things like global trade tensions, Brexit, and slower economic growth in China, Europe and the US, are all impacting the global economy. Back home the upcoming federal election, the residential market downturn, and the financial services sector's limp following the royal commission, have all contributed to negative consumer confidence.
"We see downside risk in all markets in which we operate," says Weightman.
"We have positioned Cromwell to be in a strong position to manage those risks, and indeed to be able to capitalise on opportunities that may arise should those risks eventuate."
Shares in Cromwell are up 0.91 per cent to $1.10 per share at 11.30am AEDT.
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